By Abby Glassenberg
The quilting industry is small and close-knit. People who work in this industry are often not able to speak openly about a particular company or circumstance due to the risk that they may jeopardize their professional positions. In the course of my reporting, I interviewed sixteen people including shop owners, sales reps, former employees of RJR, designers, and fabric manufacturers and was able to corroborate the facts of this story, although few sources were willing or able to go on the record. I made multiple persistent efforts by phone and email over the course of a week to get in touch with both Richard Cohan and Marcello Colaruotolo for comment, but neither of them responded to my requests.
When I talked to Ted Hoffman, CEO of the Seattle-based fabric company, Clothworks, he was on a lunch break during an enterprise resource planning conference. “I’m here to learn about software,” he told me. Although he’s a fabric company executive he explains that software is his business.
“You need software to handle accounting, inventory, and receipts from the ports. How much inventory is pre-assigned and in what way? Understanding how sales are going is an absolute requirement,” he says. “Our system has real-time reporting capabilities. Sales and inventory reports run daily and get reviewed by about half dozen people. Things can spin out of control really fast. Without software, you’re dead.”
Not all fabric manufacturers have placed as much focused effort on software as Clothworks. At RJR out-of-date systems, a botched effort to update them, and a radical shift in leadership, created an unstable climate that caused the original five designers of industry darling, Cotton+Steel, to walk away earlier this month from the modern fabric division they’d built from scratch.
Founded in 1978 as an iteration of company president Richard Cohan’s family textile business, RJR is a traditional company run in an informal way. Cohan conducts business with handshake deals, and when Melody Miller proposed the idea of a modern fabric division in 2013 the company was functioning on a cobbled together software system that couldn’t generate the kinds of sales data Cotton+Steel needed for smart business planning. Cohan agreed it was time for an upgrade.
RJR hired Acumen Group to design an INFOR distribution software system for the company. This kind of software can manage inventory, warehouse, financials, orders, purchasing, and distribution. The initial six-month timeline for the project was drawn out repeatedly until the system was finally installed in October of 2016, but the implementation was disastrous. Sources familiar with to the situation were not clear whether the software itself was faulty, whether there was a lack of training on how to use it, or whether there was some other difficulty, but as months went by systems began to flounder and shop owners experienced frustration over not receiving their orders on time and complete.
“Kim Kight lives here in Austin and we were launching her new line,” says Nicole Labry, owner of The Cloth Pocket, a modern fabric shop on Lamar Boulevard. “We were the only store that was going to have it. She was coming to do a make-and-take here and we were having a party and we couldn’t get the fabric. It was crazy. Not getting my order was devastating.”
Rachael Gander owns the online fabric shop, Imagine Gnats. “It was always very unclear when things would happen, that was the most frustrating for me,” she says. “Fabric would be expected and I would have to call and ask where it was and they would give a random date. They would charge my card, and then I’d still be sitting around for weeks wondering where my fabric was.” She eventually gave up, as did large online retailer of modern quilting fabrics, Hawthorne Threads, who stopped ordering Cotton+Steel in August of 2017.
In an effort to correct the software debacle Cohan sought out the help of an outside firm who recommended a consultant named Marcello Colaruotolo. In July, Colaruotolo began working on the system Acumen had built, “hacking” it to better suit RJR’s needs. In August he was hired as a full-time employee and Cohan seemed to be thrilled.
Prior to RJR, Colaruotolo, 42, was the president of Infinigi, a solar panel company with a residential property listed as the address. Within a short period of time, his role and influence at RJR expanded exponentially. Colaruotolo is now the company’s Chief Financial Officer and Chief Operations Officer. His wife, Sanae Colaruotolo, has been hired by the company as well as his sister, Daniela Alexander.
By January 2018 RJR felt like a much different, and less secure, place than it had just four years earlier. Cotton+Steel had always been a strong and carefully crafted brand and staying at the company felt like putting all they had built at risk. It was time to go.
Although it was very difficult, the Cotton+Steel designers were not alone in their decision to leave. John Durnell, who had been Richard Cohan’s business partner since 1991, left RJR last week after 27 years with the company. Demetria Hayward, who served as vice president of marketing at RJR after working her way up over the course of 24 years with the company, left in April and now works at Moda. Several longtime sales reps have also moved on over the past few months.
From the very start, Cotton+Steel was a division of RJR and RJR owns it outright, including owning the trademark to the name. Although the five designers who founded the division have now left, the name and brand remain with the company. Still, because of their intense involvement in shaping every aspect of the brand from its inception, many in the quilting community struggle to imagine its future without them. “When I think of Cotton+Steel, that name conjures up in my mind a particular design aesthetic. I have no idea what the brand is apart from these designers,” says Lisa Hawkes of the online fabric store Pink Hollybush Designs. “It makes no sense to me that RJR would let the designers go because I have no idea what Cotton+Steel is apart from them.”
Thank you for the in-depth reporting. Many of us were wondering what the reason behind them all leaving was. It’s surprising in this day and ages that such a big fabric company cannot sort their systems out.
Obviously “systems” in this case has many definitions. Basically it sounds like RJR just screwed up and lost the creatives that put Cotton and Steel on the map.
We’ll wait and see where these “creatives” end up!
Abby–thanks as always for asking the tough questions and doing the research to get the story. I’ve heard so many of the same things about ordering from RJR.
Thanks for posting this.
Cotton + steel fabrics
Thanks for digging up facts and sharing this.
It’s interesting – as a small business we are so conscious of how our systems (software, accounting, HR) impact our clients, but I hear repeatedly from employees at large firms and institutions how slowly or inefficiently their systems work. No employee handbook, no training, no contracts. Sure, those things cost us money, but in the long run they ENHANCE our profitability.
As a small business (probably just starting up) it’s also a lot easier, because your employees, clients, inventory, range, etc. is so much smaller than a long established large company. Trying to come up with a system that’s going to be glitch free takes a long time and there will be a lot of pushback from the long-time employees, especially the higher ups, who have “always done it this other way” and refuse to learn the new system. I worked for a medium sized non-profit where we implemented a new software for our grants data and that took eight years just to get it to where that system could talk to the accounting system and we could automate payment requests. And trying to implement a robust SharePoint solution for our files was met with resistance over and over again.
As someone who spent 16 years implementing supply chain systems – the first one which was an early version of the one mentioned above I am not surprised. The larger the company, the more complex it becomes. These systems are trying to meet a lot of different requirements and therefore they are very customisable. It takes a great deal of skill from both the software providers but also the company using them to get them right. I’ve seen it fall down on both those sides. They take a lot of designing, testing, training and implementation to get right but they get sold quite often as something that is plug and play. Therefore enough time isn’t given to the projects.
As a full-time Certified Public Accountant working with all types of business software, and a part-time quilter, I fully understand how software can make or break a company from small to large. It is sad to hear that this has happened to the detriment of such creative people. My hope is that they will find the strength and will to begin again. We must all realize that while computers run the world, it still takes humans to install, implement and maintain the systems for them to work properly.
I was surprised to learn that such a modern team was part of RJR. My co-author and I endured a tirade from the owner of RJR on the floor at Quilt Market about ten years ago, in response to her simple query about organic fabrics. He was beyond rude, yelling, and obnoxious, and didn’t care who heard him, either. I can’t imagine having to work with him. His reps just looked away.
Demetria was lovely to work with and Moda is lucky to get her.
Thank you Abby for clearing up this mystery! You always get to the bottom of things and I am so grateful. I too cannot imagine C&S without the 5 designers- I wonder- are they free to create another brand- or is there some compete clause? And when are the C&S designs not actually designed by the fab 5- and are in fact designed by an in house team. Is there a date? Many have tried to imitate their style and haven’t succeeded…. it just will not be the same- I do not think I will buy any of the C&S without the designers actually attached to the Brand. This whole story is very sad- it just goes to show you that these businesses in the craft and hobby sector are very important and people need real business sense!!
The collections that were shown at Spring Quilt Market in Portland last week were their last. There is no non-compete clause because there were no contracts. Richard Cohan does not issue contracts to any RJR designers, including Cotton+Steel. (The Cotton+Steel Friends designers did have contracts. Those were issued by Cotton+Steel.)
Well, at least there’s that advantage to handshake deals. I’ve known business-owners like this. They can be great until they turn on you. I can’t be sad the marvelous designers of C+S got into bed with RJR in the first place, as their names got out there in a major way, but I’m glad they’re now free from such a messy and ugly situation.
Do they still get earnings from the fabric sold on their last collections even though they are no longer with RJR or did they forfeit that by leaving? I love some of their prints but if they will not earn anything from their last collections then I likely will not purchase.
Although I don’t know for sure, I believe the designers will still profit from the collections they released before leaving.
Hi Abby – Is there any news yet as to where they are landing or are they starting their own company?
Hi Lisa,
I haven’t heard, but following along on Instagram it looks like everyone is making beautiful new work.
Thanks for the article Abby! As a shop owner, I’ve been extremely frustrated with C+S for the better part of 2 years and was hoping things had turned around..that did not end up happening. I had been working with John Durnell the past 6 months or so and knew he had been working extremely hard to turn the situation around….to no avail. Any word from your research on what the story will be with Rifle? Rifle IMO is the only thing keeping C+S open right now…..if they lose Rifle….what’s left for them to even remain in business?
The press release that RJR sent out said that in the fall there will be a new collection from Rifle. I don’t know if that’s because the contract with Rifle extended that far and will then come to a close, or if there’s more to that relationship. The press release also promised “new faces and exciting new designs” as well as “new policies that will strengthen the brand.”
Not to be reductive, but it sure sounds like another casualty of toxic masculinity. Breaks my heart.
YES YES YES exactly my thought especially when someone commented here about being screamed at by the RJR owner.
This makes a lot of sense…explains a lot of past history with C&S. I am sad, we have a lot of their fabric and now wonder what will happen…
Great article Abby. Computer issues aside, I think the old saying “The fish stinks from the head” applies here.
very good article! It will be interesting to see where the Cotton + Steel designers go and what they do next…and what happens next with RJR!
Thanks for getting more details on this, Abby. I’ve been a fan of C+S since their inception and use their fabrics extensively in my work so I was shocked and saddened to hear about the exit of the 5 designers. On the other hand, I always felt there was something amiss between RJR and C+S.
Anyone else remember the Cotton + Steel Fan Club they launched with enormous fanfare at QuiltCon 2017? Shortly after QuiltCon, membership fees were refunded and fans were told it wasn’t happening with no other explanation. Seems like just another sign that the fun, modern approach of the designers and their brand was not fully supported by RJR.
As a quilter and someone who spent 20 years leading teams implementing Enterprise Resource Planning systems it is not surprising that this happened. A successful implementation requires a clearly defined business process, an executive who is engaged from beginning of the project to post go-live – and lots of time from the users who already are slammed with their daily work – so backfilling works best – but is expensive. The project leader needs a clear project plan, a strong implementation team of consultants (often not the case) and they need to be a very strong leader keeping things on track. Not an easy endeavor but there can be great success. Building your own often is a recipe for disaster because it is never done. Sad……
I hope your thoughtful article, while undoubtedly accurate in what it does explain, does not portray RJR and Cotton & Steel separation in a way that could be misunderstood. I found some of the reply posts a little negative. Let me just say that RJR has become one of my favorite suppliers because of the quality of their fabrics, the artistry of their designs and the improvement in the customer service department. They will continue to by one of several marquee companies that our business features. I am grateful to the designers who created Cotton & Steel and for the generous opportunity afforded them by Mr. Cohen. I look forward to great Cotton & Steel fabrics from the new team. Thank you, RJR and Mr. Cohen for introducing and continuing C & S.
Interesting! But from what I read I understood that Cotton and Steele were booted out–NOT that they decided to leave!
Hi Sandra,
May I ask for the source of that information? Having done really extensive research for this article I can assure you that it is incorrect.
As an online shop owner in Australia so much in this article rings true for me. In many respects we have been saved from the worst because of our local distributor/wholesaler, so unlike other businesses I’ve never paid for fabric and then not receive it.
Sadly though the ongoing supply issues had a huge impact with collections arriving with several fabrics missing, which then turning up in dribs and drabs months later being the norm.
Most notable was the beautiful but incredibly angst-ridden Quicker by the Dozen block of the month. I had to sit on thousands of dollars worth of inventory until the pattern and missing key fabrics arrived to kick things off. I did so hoping the remainder of the missing fabric wasn’t far off. As it turned out fabric I ordered in November of 2016 finally arrived in September 2017.
It was hugely stressful as my business at that time was a start up and it was almost impossible to protect my reputation, and provide the seamless experience to my customers that I wanted.
I also felt the impact of the big-boy bullying tactics when I started promoting an early range on social media ( I think I had all of 150 Instagram followers at the time). Even though I owned the stock and had paid for it in full, I was forced top stop selling it for 6 weeks, until such time it was also available for sale in the US.
The beautiful designs of the founding designers and the way so many of the collections would work together was the only saving grace.
Abby, yours is one of the few blogs that I read regularly, and probably one of two or three newsletters I’m happy to see in my inbox. Thanks for your hard work in reporting what’s going on in the industry. It’s fascinating — and sometimes frustrating — to see how this industry has to adapt to a changing marketplace and how they often come up against some of the things that you see across many types of business lines. Beyond that, I’m hoping these designers land somewhere where their creativity can shine without being dragged down by industry issues.
Not up dating software as things change in an industry is not good business practice. Even buying industry specific software takes longer to implement than 6 months. It is not a plug in a new download and run. It effects every aspect of your business. Purchasing, Sales, Inventory, Accounts receivable, accounts payable. You have to load an amazing amount of data, build coding specific for your company. Train every employee to do their part and let them why it matters. My husband worked for his company as a controller so the end point finance guy. It was so hard for people to switch from the old system… whine whine whine but the other way was easier. Yes but the other way let things be fudged in the system. It did not allow for accurate reports to the company owners, managers etc. There was no correct inventory control. Where margins are less in businesses these things matter. The system we worked with took more time and labour than ever was anticipated.
Sales people of systems are trying to sell you the system. Give optimistic projections and then problems arise. Do the people who are learning the new system have the training needed to do it and people to help out with their job as they do it?
What was suppose to take a year at my DH companydragged on for 3 years and after the “go live” date.
I have heard of this happening in more than one company. Often they are family companies that have grown. And they have saved for years by not updating systems. I could go on but leave it to say that a company in this position has stressed owners, managers and employees because it hits every level. Yes even the employee who packs orders because you have to use the system and many have not had the level of computer experience to handle a drastic change that entering everything in a system at all stages to make it work for the end – the reports that owners rely on.
My husband saw his company through implementation and post implementation and then retired. But he is still working on a part time basis because he had a good working relationship with his company. Now he gets to go in and trouble shoot and build reports that they need on the “new system” and doesn’t have to do the daily work of being a controller on top. Needless to say it is way better then working long hours with stress! Even my even tempered husband got frustrated!
I hope that RJR works through their problems. Sometimes a shake up makes a company better. Sometimes not. It is up to them to decide.
You are the best Abby helping us understand what is going on in the industry – thanks! I love love love the Cotton+Steel aesthetic and designs and it was so sad those that created it left but I hope they go onto more awesome things!
Great investigative reporting! As always, you find out the facts and keep us informed. Thank you.
As a system programmer I went into a company and straighten out messes for my career. I’m retired for 18 years now, but can verify that it’s really easy to buy somebody’s software, thinking it is the perfect integrated solution for your company, only to find that they can’t live up to their claims. As a quilt shop owner from 2004-2011 I can say that RJR was the least reliable suppler then, so I can’t imagine where they are now. Good luck to the Cotton+Steel designers!
Thank-you Abby, I was wondering what was the “real story” behind the talented designers departure. You made the extra effort to find the truth for us and I do appreciate it.
Thank you for the research and posting the article.
Thanks for the in depth article. It answers a lot of questions.
I have worked in every role imaginable when it comes to purchasing, inventory control sys. I have implemented at my location and nationwide. It is an EXTREMELY difficult process. Also, I really don’t believe this level of detail was necessary. It was waaay TMI.